Paying the price for flexibility: Workers

Transcription

Paying the price for flexibility: Workers’
experiences in the electronic industry in
Mexico
Sixth Report on working conditions in the electronic
industry in Mexico
ByCentro de Reflexión y Acción
Laboral
March 2015
Contents
Contents .............................................................................................................................. 1
Paying the price for flexibility: Workers’ experiences in the electronic industry in Mexico ....... 1
Introduction ......................................................................................................................... 3
1 Economic context of the electronic industry ................................................................ 4
1.1 The electronic industry in the world ................................................................................... 4
1.2 The electronics industry in Mexico: falling salaries and increased flexibility ...................... 7
2 Features of the electronic industry: analysis and cases
2.1 Valutech pays low wage .................................................................................................. 13
2.2 IBM y Jabil: insufficient information for workers. ............................................................. 15
2.3 Flexibility ......................................................................................................................... 17
2.4 The price of a competitive price ...................................................................................... 18
2.5 Vacations ........................................................................................................................ 21
2.5 Foxconn and IBM: mandatory vacations ......................................................................... 23
2.6 Freedom of Association................................................................................................... 27
Sanmina: the same company with different realities ............................................................. 28
2.8 Sexual Harassment ......................................................................................................... 30
2.9Sexual Harassment in Microsoft and Benchmark ............................................................. 31
2.10 The new federal labor law in Mexico and temporary agreements ................................. 35
2.11 Foxconn: series of temporary contracts ........................................................................ 36
2.12 Microsoft: Many changes, little information ................................................................... 37
3 With regards to the tenth anniversary of the Electronic Industry Citizenship
Coalition, CEREAL expresses the following: ................................................................. 39
4 Cereal’s evaluation of compliance with labour rights: ............................................... 40
4.1 Index for evaluating compliance with labour rights, drawing on human rights standards 40
Colophon ........................................................................................................................... 44
2
Paying the price for flexibility: Workers’ experiences in the electronic industry in Mexico
Sixth Report on working conditions in the electronic industry in Mexico
Introduction
At the time that Mexico’s federal government was promoting its labour reform in
2012, we were assured that this would generate “400 000 new formal jobs on top of
the 650 000 jobs created annually on average.” The federal government indicated
that “the main beneficiaries (…) would be young people and women, the new set of
rules would make it easier to access the market labour.”1 These claims turned out to
be only a half-truth.
In this fifth report, Cereal summarizes the impact of this reform through analysis and a series of
emblematic cases.
After two years of the modification of the labor law, and in what was considered its “maturing
year”, creation of new jobs has been much lower than expected. If we consider that temporary
jobs have outgrown stable jobs and that working and wage conditions have deteriorated, we
realize that the current outlook is not very promising.2
Some of the main outcomes of these reforms are the devaluing of the labor force and
increasing job flexibility, resulting in situations whereworkers are not able to access other
recognized universal rights such as health, nutrition, education, etc. If we consider that wages
haven’t had a substantial nominal increase3 and that the purchasing power of the minimum
wage is 77% lower than 10 years ago, it is easy to realize that the wage paid to the workers is
not enough to satisfy basic needs.
This devaluation of the labor force has been condoned by illegitimate unions. The companies
sign contracts with these unions behind the workers’ backs. Jointly, these unions prevent
theworkers from organizing and seeking fair working conditions.
Women make up the majority of the assembly work force of these manufacturing companies,
regularly subject to low category jobs and very unequal power relations with men. Quetziquel
Flores Villicana, member of the academic staff at the Universidad AutónomaMetropolitana,
points out that along with the labor reform, the consolidation of a “substantial equality” in the job
market was announced, but this has never materialized into providing effective labor rights.” 4In
contrast with male workers, women have to make more efforts in order to exercise their right to
information, hiring and job promotion, amongst others rights.
After addressing these core issues - needed to understand the current labor conditions of our
country - we can come to the conclusion that the recent labor law reform in Mexico has not
contributed to an improvement in the quality of life of the workers; furthermore, it has
undermined already existing sources of employment.
Rubenia Guadalupe Delgado Figueroa /Director of Fomento Cultural y Educativo A.C.
1
http://anuario.upn.mx/2012/index.php/plaza-juarez/72067-la-reforma-laboral-en-mexico-deja-en-entredicho-a-pena-nieto.html
2
http://www.elfinanciero.com.mx/economia/en-dos-anos-reforma-laboral-catapulta-el-empleo-eventual.html
3 Electronic Industry workers keep on earning generally 2 minimum wages
4http://www.cimacnoticias.com.mx/node/66919
3
1 Economic context of the electronic industry
1.1 The electronic industry in the world
For the purposes of our analysis, the electronics industry is understood as the industry that
produces devices whose function is to process some type of information, for example,
computers, smart phones, video game consoles, digital televisions, printers, electronic tablets,
etc. The electronics industry is currently one of the largest and most dynamic in the world. It is
estimated that in 2014 the value of the electronic devices produced in the entire planet was
close to US $3,722 billion dollars.5This industry is also characterized by its highly globalized
production chain. The parts that make up an electronic device are produced in different a
geographical zone, which is reflected in the high trading volume of electronic devices between
countries. According to the World Trade Organization (WTO), exports of Office and
telecommunications equipmentin 2012 represented 9.3% of total international trade.
Table 1
World merchandise trade by sector 2012
Value
Billion
dollars
Agricultural products
Fuel and products of the extractive industries
Fuels
Manufacturing
Iron and steel
Chemical products
Office and telecommunications equipment
Automotive industry products
Textiles
Clothing items
Agricultural and livestock products (AsA)
Non-agricultural and livestock products (AMNA)
1657
4139
3375
11490
486
1957
1674
1295
286
423
1385
16546
Part
In world
merchandise
exports
9.2
23.1
18.8
64.1
2.7
10.9
9.3
7.2
1.6
2.4
7.7
92.3
Source: International trade statistic 2013. World Trade Organization (WTO)
The electronics industry is also one of the industries with the strongest growth in the world.
According to Global Insight, the world production of electronic devices is expected to reach a
value of 5,298billion dollars by 2020.6
5Zavala Aznar, G. (November 2013) Secretaria de Economía “Industria electrónica”.
http://mim.promexico.gob.mx/work/sites/mim/resources/LocalContent/290/2/141202_DS_Eletronico_ES.pdf
4
Graph 1
Forecast of global production by the electronics industry 2013-2020
Source: Global Insight
Due to the market’s growing demands to reduce production costs, most of the brand name
companies, known as original equipment manufacturers (OEMs), outsource manufacturing
services to specialized companies known as Electronics Manufacturing Services (EMS).
Outsourcing production allows the brand name companies to reduce production costs and focus
their efforts on design, innovation, marketing, and sale of final products. The gap in the profit
margins7 between the brand name companies and the EMS is large: this margin is calculated at
close to 27% for the former, and close to 6% for the latter8. In this way of doing things, the
manufacturing labor cost represents around 0.5% of the sale price9.
Geographically this division between OEMs and EMS also coincides with the division between
poor and rich countries. In this way, the activities with greater added value carried out by the
OEMs, like design, innovation and marketing, are done in developed countries like the United
States, China, Holland, Singapore, Finland and Canada, while the assembly and manufacturing
activities carried out by the EMS are undertaken in poorer countries like Mexico, India, Thailand
and Philippines.
Outsourcing manufacturing processes allows OEM companies to reduce working capital
requirements and obtain greater flexibility in production. In this way, the OEM companies
transfer the risk of unexpected changes in demand to the contracting companies. Thus the
OEMs can focus on activities considered more strategic and of greater added value.
7The indicator used is the gross margin:“A company's total sales revenue minus its cost of goods sold, divided by the total
sales revenue, expressed as a percentage. The gross margin represents the percent of total sales revenue that the
company retains after incurring the direct costs associated with producing the goods and services sold by a company.”
(Investopedia: http://www.investopedia.com/terms/g/grossmargin.asp, accessed on November 24, 2014).
8Harris, Anthony (2014, October), “Dragging out the best deal. How billion dollar margins are played out on the backs of
electronic workers”, http://www.somo.nl/publications-en/Publication_4109, accessed on November 24, 2014.
9Ibíd.
5
Table 2.
The 50 most important EMS companies according to world sales201310
EMS
Origen
EMS
Origen
Taiwan
2
Hon Hai Precision
Industry (Foxconn )
Pegatron
26
Creation Technologies
Bumaby, BC, Canada
Taiwan
27
VIDEOTON Holding
Flextronics
Singapore
28
Éolane
4
5
Jabil
New Kinpo Group
St. Petersburg, FL
Taipei, Taiwan
29
30
6
7
Sanmina
Celestica
San Jose, CA
Toronto, Canada
31
32
8
9
Angleton, TX
Shenzhen, China
33
34
Shanghai, China
35
Di-Nikko Engineering
Nikko, Japan
11
Benchmark Electronics
Shenzhen Kaifa
Technology
Universal Scientific
Industrial Co., Ltd (USI)
Plexus
VTech Communications
Wong’s International
(Holdings) Limited
V.S. Industry
Ducommun LaBarge
Technologies
ALL CIRCUITS
OnCore Manufacturing
Székesfehérvár,
Hungary
Le Fresne sur Loire,
France
Hong Kong
Hong Kong
3
Neenah, WI
36
Son, Netherlands
12
13
14
15
16
Venture
UMC Electronics
SIIX
ZollnerElektronik Group
Sumitronics
Singapore
Saitama, Japan
Osaka, Japan
Zandt, Germany
Tokyo, Japan
37
38
39
40
41
17
18
Beyonics Technology
Asteelflash
Singapore
Paris, France
42
43
19
New Taipei, Taiwan
44
Jasper, IN
45
SMTC
Laguna, Philippines
46
SMT Technologies
22
Global Brands
Manufacture (GBM)
Kimball Electronics
Group
Integrated MicroElectronics, Inc.
Fabrinet
Neways Electronics
International
Hana Microelectronics
PartnerTech
KeyTronicEMS
Computime Limited
Nippon Manufacturing
Service
SelcomElettronica
Orient Semiconductor
Electronics
Kitron
Pathumthani, Thailand
47
SVI
23
24
3CEMS Group
Enics
Guangzhou, China
Zürich, Switzerland
48
49
Scanfil EMS
LACROIX Electronics
25
WKK Technology Ltd.
Hong Kong
50
Sparton
Markham, Ontario,
Canada
Sungai Petani, Kedah,
Malaysia
Bangkadi,
Pathumthani, Thailand
Sievi, Finland
Vern-sur-Seiche,
France
United States
1
10
20
21
Senai, Malaysia
St. Louis, MO
France
San Jose, CA
Bangkok, Thailand
Vellinge, Sweden
United States
Hong Kong
Japan
Castel Maggiore, Italy
Kaohsiung, Taiwan
Billingstad, Norway
Source: Manufacturer Market Insider
10 Zavala Aznar, G. (November, 2013) Secretaria de Economía “Industria electrónica”.
6
1.2 The electronics industry in Mexico: falling salaries and increased
flexibility
Mexico has an electronics industry made up by more than 800 companies, which specialize in
assembly and manufacture of electronic consumer products (televisions, cellphones and
computers). These companies also produce, although to a lesser extent, devices for the
medical, automotive and aerospace industries. Mexico maintains its appeal as destination of
investment due to its low production costs. According to the consultancy firm KPMG, in 2014,
the costs of doing business were 18.7%lowerin Mexico than in the United States. Particularly,
the cost of labor in Mexico has reached levels that are too low, even lower than China.
According to official data, in June 2014 the monthly minimum wage in China ranged between
US $162 and 309, while in Mexico it was US $153 dollars11. In fact, labor in Mexico is cheaper
than in Tibet, where the minimum wage is equivalent toUS $211 per month (ibid.).
Graph 3
Estimated cost of doing business in different countries2014
Source: Competitive Alternatives. KPMG’s guide to international business
edition.http://www.competitivealternatives.com/reports/2014_compalt_repo
According to the Secretariat of Economy of the Mexican government, the electronics industry
represents 4.7% of the GDP (Gross Domestic Product) registered annually. 12In 2014, this
sector’s exports exceeded US$ 75,000 million.13According to Mexico’s National Chamber of the
Electronics, Telecommunications and Information Technology Industry (Canieti), more than
600,000 people work in this sector, which contributes 3.5% of the world production of electronic
devices14. At present, Mexico is the number one exporter of flat screen TVs in the world, fifth
largest exporter of computers, and tenth of cellphones.
11Autor (October 13, 2014), “Mexico cuts salaries”, Mural, ,http://www.mural.com/consulted 4 January 2015.
12 Barajas, Oswaldo (April 14, 2014), Electronics Online, “Electronics industry drives Mexico’s
economy”,http://www.electronicosonline.com/2014/04/14/industria-electronica-empuja-economia-de-mexico/ (accessed on
November 24, 2014).
14Cesar Castro Rodríguez, CANIETI’s chair, western section, during a meeting with Cereal in Guadalajara, 18 November,
2013
7
Graph 415
Mexican Electronics Exports and Imports2009-2013
Source: Global Trade Atlas, 2013.
Graph 5
Main export destinations of Mexico’s electronics industry 201316
Source: Global Trade Atlas
16Zavala Aznar, G. (Noviembre 2013) Secretaria de Economía “Industria electrónica”.
8
Table 3.
Main products exported by Mexico’s electronics industry 201317.
World ranking
Description
1st place
4th place
4th place
8th place
Flat screen TVs
Computers
Microphones, speakers and headphones
Cellphones
Source: Global Trade Atlas
Despite of the dynamism shown by the official statistics about the electronic industry in Mexico,
a small fraction of this activity is related to design or research and development. In 2012, the
institution known as ProMéxico carried out a study on the demand for components necessary in
the manufacturing of televisions in Mexico. This government department estimated that close to
94% of these components are imported, which reflects the low participation of Mexicans in this
industry’s production chain which, paradoxically, has become one of the most important in the
country.
Graph 6.
Percentage of domestic and foreign consumables the manufacturing of televisions in
Mexico 2012 (million dollars)18
Source: ProMéxico with data from Colliers 2013
Although some companies and the government itself have made efforts to change this situation,
17Ibid.
9
to this day the main contribution of Mexicans to this industry continues to be their cheap labor.
Thus, the vast majority of the hundreds of thousands of Mexicans that work in electronics
factories are modest and anonymous workers who do not participate in these companies’ senior
management. CEREAL believes that this situation contributes to a range of labor problems,
some of which are presented in this report.
Table 4
Direct foreign investment per country in Mexico’s electronics industry (Millions of US
Dollars) 2013.
Country
DFI 2010 (MD)
DFI Accumulated 2002-2012 (MD)
United States
Netherlands
Japan
Singapore
Taiwan
Switzerland
Germany
Others
Total
599.9
220.3
-24.2
52.4
115.5
9.4
-1.4
13
1 184
6775
3168
548
356
412
130
150
480
13 326
Source: Secretariat of Economy
Graph 7
Forecast of Mexico’s electronics industry production.19.
Source: Calculations of ProMéxico with information from INEGI and Global Insight
19Zavala Aznar, G. (November 2013) Secretaria de Economía “Industria
electrónica”.http://mim.promexico.gob.mx/work/sites/mim/resources/LocalContent/290/2/141202_DS_Eletronico_ES.pdf
10
Table 5.
Table: Main transnational companies of the electronics industry in Mexico
Company
Subsector
State
Alcatel
AMP (Tyco Electrónicos)
Amphenol
Benchmark
Celestica
Compal Electronics
Ericsson
Falco electronics
Flextronics
Foxconn
HP
International Rectifier
Jabil
JVC
Kodak
Kyocera
LG
Medtronic
Motorola
Panasonic
Philips
Plexus
RectificadoresInternacionales
Samsung
Sanmina
Sanyo
Siemens
Skyworks
Sony
Tatung
Texas Instruments
Universal Scientific
Wistron
Xerox
Communications
Components
Components
EMS
EMS
Audio and video
Communications
Components
EMS
EMS
Computing and office
Semiconductors
EMS
Audio and video
Optical instruments
Components
Audio and video
Medical equipment
Communications
Audio and video
Components
EMS
Semiconductors
Audio and video
EMS
Audio and video
Components
Semiconductors
Audio and video
Audio and video
Semiconductors
Components
EMS
Computing and office
Sonora
Sonora
Baja California, Sonora, Nuevo León
Jalisco, Sonora
Nuevo León
Chihuahua
Estado de México, Querétaro
Yucatán
Aguascalientes, Coahuila, Jalisco, Chihuahua
Chihuahua, Baja California, Guadalajara
Jalisco
Baja California
Chihuahua, Jalisco, Tamaulipas
Baja California
Baja California, Aguascalientes
Baja California
Baja California, Tamaulipas, Nuevo León
Baja California
Tamaulipas, Jalisco
Baja California, Monterrey
Durango
Chihuahua
Baja California
Baja California, Estado de México
Nuevo León, Jalisco, Coahuila
Baja California, Nuevo León
Monterrey
Baja California
Baja California
Chihuahua
Aguascalientes
Jalisco
Chihuahua
Aguascalientes
Source: Official sites and Colliers International
11
Figure 1.
Geographical location of the main companies of Mexico’s electronics industry20
Source: Official sites and Colliers International
20 Zavala Aznar, G. (November 2013) Secretaria de Economía “Industria electrónica”.
12
2 Features of the electronic industry:
analysisand casesccCereal works directly with individuals and groups
of workers within the electronics industry providing support and legal advice. These
specific experiences, based on workers’ testimonies, provide a snapshot picture of what
is actually happening to some workers at factory level in Mexico’s electronics sector21.
2.1 Valutech pays low wage
Finding a job in Mexicali, as in the rest of the country, is hard. According to data from the INEGI
(Mexico’s National Institute of Statistics and Geography), the unemployment rate grew during
this last year in this entity.
Mariana is currently a Valutech employee. Shetells us about her experience:
“I spent 3 months looking for a job and nothing… It’s really hard to find a place to work,
especially if you’re old like me.”
Despite this, Mariana continued to look for a job. A friend of hers told her to go to Valutech, as
the workers believe it’s easier to find employment there because they don’t ask for a lot of
experience.
Mariana applied for a job as an operator at Valutech and got the position.
“I felt relieved to find a job as I was really in debt and didn’t know what I was going to do.”
But the happiness soon faded, when she found out how much she was really going to earn.
“When I got the job they told me I would earn 955 pesos a week. It’s not a lot, I thought, but
because of the tight spot I was in, those pesos would help a lot. Afterwards, when I calculated
the deductions and expenses I would have to make in order to work there, I realized it wouldn’t
be enough.”
Mariana’s payroll specifies that her salary is 955 pesos a week, but in order to get to work she
has to hire the service offered by the company, as there are no accessible bus routes from her
house, and to take them she would have to walk for more than 10 blocks, with the security risks
that implies. In addition, she had to ask for a loan from the company, as her son had a dental
problem that the Social Security does not cover. In the end, between the deductions and
payment of the loan, she earns a real salary of 416.39 pesos, which represents 70% of the
basic urban food basket for one person and 20% of the basic urban food basket for the average
Mexican household according to the official agency22which makes the measurements.
Table 6
21 Cereal provides support and/or legal advice to approximately 1000 workers each year. To prepare this report, Cereal
interviewed approximately 100 workers (80% of them are women) in Guadalajara (and its metropolitan area), Mexicali and
Reynosa. Cereal held a meeting with companies on October 29th 2014 to discuss the cases and, afterwards, doublechecked the information included in this report; in most cases this entailed interviewing a worker (or workers) for a second
or third time; and/or checking documents such as pay slips, employment agreements, etc.
22 The National Council for the Evaluation of Social Development Policy (Coneval) has, by law, the mandate to perform the
periodic measurement of poverty levels (and, therefore, of establishing and updating the value of the official basic basket).
13
Weekly salary
Deductions
Infonavit Contribution (housing loan)
Transportation to the company
Dental Insurance Loan
Social Security
Total
955 pesos
165.96
150
200
22.65
416.39
Mariana has to cover her three children’s minimum expenses for food, transportation, and
education with 1665.5 pesos a month, in addition to her house’s maintenance costs (water,
electricity, gas). This is especially hard in the country’s border area given the high prices of
these goods and services, as well as the need to fight the extreme weather(compared with
other regions, a household in some border cities consumes more electricity in the winter,
heating the house; and more electricity in the summer, cooling the house).
In 2014 the accumulated inflation in Mexicali was of 5.41%, 1.52 percentile points above the
national mean, according to data of the Observatory of the Border Economic Situation, of the
Department of Economic Studies (DEE) of the Colegio de la Frontera Norte.
Although the Mexican Constitution says in its article 123 that:
“The salary must be enough to satisfy the normal necessities of a head of family, in the
material, social and cultural order, and to provide for the mandatory education of their children”
The reality is very different. The current value of the basic basket per person in the area where
Mariana lives is of 2,526.49 pesos a month23. If we consider that her house has 4 members,
two of them children, Mariana would need 8,590 pesos just to buy the basic products 24.
Even though this situation implies serious impact risks on human rights25, the company doesn’t
appear to have a plan to mitigate this impact.
“Imagine!” says Mariana, “I have to work overtime or look for work elsewhere to make ends
meet at the end of the month and sometimes I don’t. It feels awful to not have enough to give
your children the necessary. Sometimes they can’t go to school because I don’t have money for
the bus. What future are they going to have without education and malnourished?...The same
as mine? To work to survive?”
Mariana continues to work at Valutech for fear of not finding another job and, with little hope of
things changing, she wakes up every morning “with the hope of working so her children can
have a better future.”
In a written communication dated September 10th, 2014, a Valutech representative commits
himself to “clarify any concern that our personal might have”.Nevertheless this was the last time
that we had contact with the company. Valutech did not comment at all with regard to the issues
23According to data of the Coneval, (online search, June 18, 2014).
24Considering the economies of scale and equivalent adult, according to the official methodology used to measure poverty.
25Several human rights are affected, among them: the right to a living wage, to right to food, to health, to education, the right
to rest and leisure (low wages can sometimes put pressure on workers to do more overtime than they wished to do and/or
to take a second job to have a complementary income).
14
mentioned here.
2.2 IBM y Jabil: insufficient information for workers.
According to the testimonies of hundreds of workers interviewed by Cereal, most of the
companies of the electronics industry located in the metropolitan area of Guadalajara refuse to
provide workers with a copy of their work agreement despite what Mexican law states.26
We documented the case of IBM in the last report, a company hiring personnel from the Kelly
agency. In that case a female worker did not have sufficient documentation to assert a proper
defense when she was dismissed. In response to the case published in our report27, IBM said “it
had asked its suppliers to give the personnel they hire ‘a copy of the employment agreement’.
Some people received a letter-size written page without letterhead, listing some of their work
conditions. This document in no way substitutes the employment agreement and, thus, IBM did
not deliver on its statement which we published in our previous report.
A similar situation occurs at Jabil in Guadalajara.
In mid-July 2013, a group of 40 workers visited Cereal’s offices to ask for legal advice. They
were scared because the company Jabil was demanding they sign a new work agreement.
Lucía tells us:
“They went to my workplace and told me to sign a copy of the agreement. They explained that it
had to be done for an audit and that they were updating their archives, so we didn’t have any
other choice but to sign. I asked them if I could borrow it to read it, because I was working and
didn’t have time to read it calmly. The woman told me they couldn’t lend it to me and to just sign
it.”
Lucía refused to sign the agreement and they called her in to the Human Resources office,
where, as she told us, the following happened:
“They called me and told me I had to sign and that I couldn’t refuse. They showed me the
paragraphs that they said had been changed but they refused to lend it to me. I didn’t want to
sign until I was sure and I asked for a copy of my previous agreement, but they refused to give
it to me. They had me in there for more than an hour.”
Many of the workers who at first had approached Cereal no longer wanted to proceed with their
complaint; the running commentary was that they were afraid of losing their job. This group of
workers did not receive a copy of their new employment agreement.
26This is what the law states: “Working conditions should be stated in writing when there are no active collective agreements.
There should be two copies, at least, one for each signing party” (Official Gazette of the Federation 2012, November 30.
Federal Labor Law, Mexico, art. 24). It should be noted that the article does not mention the word “contrato (de trabajo)”
(work agreement). In practice, this opens the door for an interpretation used by the companies to provide the workers with
a written statement of their working conditions, but not of their work agreement. This is alaw-abiding practice, some
companies argued.
27After the reform. Fifth Report about the labor conditions of Mexico’s electronic industry,
http://www.fomento.org.mx/novedades/Informe2013-ingles.pdf (page 18).
15
Lucia continued with her complaint and with Cereal’s mediation and after several tries, she was
able to get a copy of her agreement.
In a meeting which took place in Guadalajara on October 29, 2014, Jabil representatives
assured Cerealthat 100% of the workers had a copy of their agreement, information which
Cereal undertook to corroborate. Cereal confirmed that at least 32 workers, independently of
the first group, did not receive a copy of their agreement; the workers assured Cereal that they
were only given it to sign but did not receive a copy.
Jabil undertook, through its representative, to turn over a copy of the agreements to any worker
who did not have one. We urged the workers to ask for this document. Most of them didn’t think
it was a good idea for fear of giving rise to some type of reprisal.
As mentioned above, companies constantly refuse to hand over a copy of the employment
agreement to the worker. The lack of this document sometimes represents an extra obstacle for
a proper defense of the worker’s rights.
Cerealsent a copy of the case to IBM and Jabil. From Jabil we received an answer which says
the following, making reference to a meeting held in October 2014:
“At that meeting, documentation that Jabil’s contracts meet legal requirements and were
merely a legal change that would not impact employee’s tenure or overtime, was provided to
CEREAL representatives who reviewed and confirmed their validity”.
Cereal did not reviewed nor confirmed the validity of this documentation. The first interest of
Cereal is to achieve that the workers have sufficient information about their labor conditions and
we wouldn’t validate anything in their name. Cereal requested repeatedly from Jabil to hand out
the copies of the old and the new contract to the workers so that they themselves would be able
to asses if both contracts where effectively the same.
Jabil proposed to show Cereal documents in which the signature of the workers was to be
found, indicating they had received their contract. Cereal refused to accept this proposal
because, as we recounted in the previous case, according to the workers, they sign their
contracts without getting the chance to review them.
In its reply, IBM confirms that itdidn’thand out copies of the contract to the workers. The
document given out doesn’t contain all the information about the working contract (because it is
not a copy of the contract). When IBM committeditself to hand out copies of the contract, we
understood that its intention was not only to comply with the legal provisions, but rather inspired
by the EICC Code of Conduct, which IBM signed, and which “encourages Participants to go
beyond legal compliance”28.
In the following, the entire answers about the cases are recited:
Jabil’s response:
28http://www.eiccoalition.org/media/docs/EICCCodeofConduct5_English.pdf
16
“Working closely and transparently with stakeholders such as CEREAL is one important way
Jabil can create sustainable change through common goals. Therefore, we are surprised and
disappointed that CEREAL has pursued the Jabil cases included in this report.
Jabil’s local management has met multiple times with CEREAL concerning these issues, and
Jabil’s Vice President of Social and Environmental Responsibility met with CEREAL in October
2014. At that meeting, documentation that Jabil’s contracts meet legal requirements and were
merely a legal change that would not impact employee’s tenure or overtime, were provided to
CEREAL representatives who reviewed and confirmed their validity. Jabil invited CEREAL to
conduct an on-site audit of contracts and interview employees, but they declined. All cases in
which CEREAL has provided the names of employees have been resolved.”
IBM’
“IBM is a company committed to CSR. We work together with our value chain to assure the
compliance with the EICC code of conduct. In 2013 EICC assessed that Kelly Services meets
the requirements of the articles 24 and 25 of the Mexican Labor Law through the delivery of a
document that meets the requirements established to certify a labor subordination and the
conditions under which it was agreed that relationship. This guaranties the correct defense of
the labor rights in any case, since the corresponding jurisprudence like the applied legislation in
working related topics has established the concept of “in dubio pro reo”. This is to say that if
elements are missing, the authority should favour the part that it is in a state of
defencelessness. As part of the compliance with the EICC code IBM will verify the compliance
of Kelly Services in the second half of 201529.”
2.3 Flexibility
In addition to reducing salaries, manufacturing companies search for the greatest flexibility
possible to reduce costs and to enable them to respond quickly to the demands of brand name
companies, their clients. As can be observed in this report, some of the tactics used by the
companies of the electronics industry in Mexico to guarantee this strategy are:
 Lack of follow-up or partial follow-up of suppliers.
 Most companies included in this report have signed the EICC (a global industry-wide

association) Code of Conduct. This Code is a “total supply chain initiative”. A signing
company acknowledges the commitment to monitor its supply chain. “At a minimum,
Participants shall also require its next tier suppliers to acknowledge and implement the
Code”. Notwithstanding, in practice, many companies do not monitor the full implementation
of the Code, or only do this partially. Some companies do not acknowledge the negative
impacts on human rights of their supply chain if these impacts are the result of business
activities of their suppliers, although the latter constitute their supply chain.
Unilateral relationships with workers:
o Many companies provide limited or belated information/documents to workers,
thus leaving the worker in a weaker position when trying to prepare a proper
defense of his/her rights.
29This is a translation from the Spanish response sent to Cereal by IBM.
17
o
Lack of collective negotiations and agreements regarding major changes of
working conditions (facilitated by agreements with unions controlled by the
companies and/or the government).
o
Restriction of freedom of association.
o
Use of mechanisms that facilitate the use of the workers’ vacations as workdays
or working time.
o
Disproportional use of temporary and/or outsourced employment; lower
chances of obtaining a permanent position.
o
Wages below the official poverty line.
2.4 Theprice of a competitive price
It is common for companies to hire transportation services for their employees, sometimes
because they are located in areas that are difficult to reach through public transportation or
simply to guarantee a direct route to the work center. Jabil, Valutech and Sanmina30 are no
exception.
These companies hire personnel transportation companies to provide transportation service for
their employees. The company Jabil, located in the metropolitan area of Guadalajara, hires
Scott, which, among its advantages, provides transportation services around the clock.
One of the premises Scott expresses in its mission is to “Provide all of our customers with a
safe, timely and comfortable transportation service at a competitive price”.
The euphemistic expression of “competitive price” means they offer low prices or lower prices
than their competitors for the same service. But how is it possible they offer “competitive
prices”?
Manuel works for Scott covering different routes for Jabil.
One of the main problems he faces as a driver of this transportation company is the schedules
in which his routes are programmed. Manuel describes his schedule:
“My schedule begins at 4 a.m. I finish the first route at 8:15 and at 11:50 I have to be at the next
point to begin my next route, which ends at 16:40, more or less. I cover my last routes from
19:30 to midnight. To get from my house to the Noria, which is the point where Scott’s buses
leave from, it takes me at least 45 minutes or 1 hour, depending on traffic. I get home and half
sleep and eat because I have a break of 4 hours between each trip, but if we subtract the time it
takes us to get home and eat we can only sleep 2 hours. Working as an operator at Scott is
hard, but we need the work.”
Javier works for Viajes y ServiciosTurísticos San Carlos covering Valutech’s routes, and has a
similar schedule:
“I have to wake up at 12:00 to get diesel. At 1:00 we already have to have the buses loaded
with diesel. And we go to the plant to wait for the people who get out at 2:00.At 2:20 we leave
30Jabil and Sanmina facilites are located in Guadalajara; Valutech’s facility is located in Mexicali.
18
the plant. Other days, I start at 4:00 in the morning. I go to the point (where workers are picked
up) and begin at 4:20 and arrive at the plant at 6:05. They start work at 6:30 and I have to be
there at 6:05 or 6:10 so they can form a line and go in. It is a really long route. I also work the
afternoon shift which starts at 2:00 in order to be at the factory at 5:00 because they start work
at 5:30 and I wait there for the morning employees to come out. I wait and they come out at
5:30, and we leave the factory at almost 6:00 to take them home again. When I finish the route
it is already 7:00. And at that same point I wait until 8:00 because another route begins there of
employees who start work at 9:30. I get to the plant at 9:05 or 9:10. From there I go home to
sleep and I get there about 9:40, but after taking a shower and things, I go to sleep around
10:20 and again have to wake up at 12 a.m.”
The Electronic Industry Citizenship Coalition - EICC acknowledges that excessive work shifts
put employees’ health, safety and work performance at risk. The EICC position is that “no EICC
member should allow their workers to work a) more than 60 hours a week, or b) work longer
hours than what the law permits.” If an excessive shift is deemed a “priority” in the EICC audit,
the member company must establish corrective measures. 31.
We can see both drivers work for more than 12 hours a day, and they have to subtract from
their hours of rest the time it takes to go home and to the following point where the route leaves.
The time left is not even enough to sleep for a period of 4 consecutive hours.32Studies
performed by the Center for Disease Control and Prevention of the United States’ Health
Department demonstrate that lack of sleep increases the difficulty to perform many daily
tasks.33Since they are personnel drivers, the risk is heightened, as not only the driver’s health is
at risk, but also the physical integrity of the passengers.
Javier tells us:
“We’ve had small crashes, scrapes or dents to other cars. I’ve been a driver for three years and
it’s happened twice and it’s because in the mornings, when the sun is coming up, that’s when
you feel sleepy.”
These excessive working hours are due to the fact that most of the drivers’ salary is made up by
commissions obtained for each trip. On average, a worker from this company earns 800 pesos
a week, minus legal deductions, in addition to, in Javier’s case, paying a loan the company
made to pay for the license needed to work, as when they have to renew it, the company is not
responsible for these expenses. In the end, the net weekly earnings are, on average, of $400
pesos, which are only enough to buy less than 68% of the official basic urban food basket
forone person and less than 20% of the official basic urban food basket for the average
household.
The work scheme these companies’ drivers have is one of the factors that allow these
companies to offer a “competitive price” as the drivers earn a very low salary. In the case of
31EICC (2014, June), “EICC position on working hours”,
http://www.eiccoalition.org/media/docs/EICC_WorkingHoursPosition_June2014.pdf
32http://www.nia.nih.gov/
33“Unhealthy sleep-related behaviours”, “Effect of short sleep duration on daily activities- United States, 2005-2008”,
Morbidity and Mortality Weekly Report (Centers for Disease Control and Prevention), Vol. 60, No. 8, March, 2011,
http://www.cdc.gov/mmwr/PDF/wk/mm6008.pdf
19
Turística San Carlos, located in Mexicali, where Manuel works, the salary is only made up by
commissions set up on a per trip basis, in addition to the fact that the transportation companies
deduct costs they should absorb, such as the cost of transporting a mechanic, one reason why
the workers have to do overtime in order to complete a salary that is moderately enough.
“For example, Manuel told us when the unit breaks down, “we have to pay for the cost of
transporting a mechanic … and if it breaks down in a dangerous spot, we cannot abandon the
unit, we have to stay there and protect it, but if something gets stolen, we still have to pay
whatever they steal.”
This situation is serious due to the impact it has on the bus drivers’ health, in addition to putting
the passengers’ lives at risk.
Early September we met with Jabil to explain the conditions under which Scott operates
according to workers’ testimony. Jabil assured us that everything was in order and that its
audits had not raised any red flags and that from the companies they audited when searching
for a supplier, Scott was the best evaluated.
Scott and LipuTransportesSeguros bus in the Sanmina personnel. Both transportation
companies belong to the same owner. In October of 2014 we contacted Sanmina to talk about
the practices of this supplier that it shares with other companies.
We held a meeting with Sanmina and those in charge of the transportation companies in late
October. Sanmina and its suppliers recognized shortcomings in the management system that
Cereal described based on workers’ testimonialsand offered a remediation plan. Some of the
pertinent points include:
 taking measures so workers may enjoy their weekly day off, will give a bonus to lessen the


impact on their wages
more personnel will be hired to lighten the drivers’ workload
a log system will be established affording workers more certainty about the commissions
they will be paid.
These changes are significant since they will benefit the majority of the Scott and Lipu drivers
and not just those on the Sanmina routes.
After this meeting, Jabil agreed to hold back the payment of services to Scott to put leverage on
them so the worker could receive his severance payment. Scott gave the worker his severance
payment, but only50% of the overtime payment.
In this case the transportation companies and those hiring their services “should cover adverse
human rights impacts that the business enterprise may cause or contribute to through its own
activities, or which may be directly linked to its operations, products or services by its business
relationships”34.
This remediation plan is a positive first step and CEREAL asks that other companies within the
industry should also consider adopting concrete changes to help the drivers avoid the risks
34United Nations Guiding Principles for Business and Human Rights.
http://www.ohchr.org/documents/publications/guidingprinciplesbusinesshr_en.pdf
20
outlined above.
Sanmina sent the following response to Cereal with regards to this case:
“Sanmina takes it very serious that its suppliers work according to the outlines of CSR and will
establish a plan of audits in compliance with the requirements of EICC to assure that they
comply with the local legislation, international standards and internal principles of CSR. (…) As
an initiative of Sanmina to assure working conditions of the drivers and the security of the
workers, Sanmina suggests to manage with Cadelec the implementation of a certification model
for companies that provide transportation of personal. Meanwhile, Sanmina will assure that all
workers and drivers don’t work more than 28 hours during the week and no more than 12 hours
extra, and that they will have at least one day off during the week.”
Jabil wrote with regards to this:
“Jabil also asserted at the October 2014 meetingit does not have any control of SCOTT
Transportation or its employees’ schedules. However, Jabil did propose an industry-wide
initiative to consider the issues facing transportation employees, and help find solutions. It is our
understanding this case was resolved in December 2014 with severance paid to the drivers.
Employees there are provided multiple mechanisms for seeking resolution to workplace
challenges, including an Open Door Policy, anonymous hotline, and human resources
representatives available during every shift.
We value the contribution employees make to Jabil’s success and are eager to collaborate with
partners who are transparent and honest in order to solve challenges of importance to them.”
2.5 Vacations
Enjoying vacation days is a basic rightfor any worker. Of all the countries in the world, Mexico is
one of the countrieswhere workers have the fewest vacation days per year. According to the
Federal Labor Law, during the first year of service in a job, a Mexican worker has the right to
take only 6 vacation days. Even though the law sets out that those days will increase by
accumulating several years of service, the reality is that most of the workers of the electronics
industry can only take 6 vacation days per year without expecting the number to increase. This
is due to the fact that they are hired under temporary agreements (even though they are not
really temporary workers), thus are always considered first-year workers. Cereal has learned of
hundreds of cases of workers who have worked for the same company during 3, 5 or even 7
years and are still allowed to take only 6 vacation days a year. Moreover, in many cases these
days are given in dribs and drabs, that is, intermittently and not continuously as the Mexican law
itself demands.
According to the study “Prices and earnings 2012”35, published every three years by the UBS
bank, Mexico is the country where workers work more hours per year, 2,375, and where they
have fewer vacation days. In other Latin-American countries which have a similar level of
35Höfert,Andreas (2012). Prices and earnings. A comparison of purchasing power around the globe. UBS.
http://www.ubs.com/global/en/wealth_management/wealth_management_research/prices_earnings.html
21
developmentto Mexico, workers have the right to more vacation days. In Bogotá, for example,
workers have the right to 15 vacation days and in Caracas 18 days. The 6 days of vacation
which Mexican workers have the right to take are far from the 30 days enjoyed by Brazilian
workers
Table 7
Working hours and vacation days36
City
Working hours per year
Vacation days per year.
Amsterdam
Athens
Auckland
1,755
1,822
1,852
24
23
20
Bangkok
Barcelona
Beijing
Berlin
Bogotá
Bratislava
Brussels
Bucharest
Budapest
Buenos Aires
Cairo
Caracas
Chicago
Copenhagen
Delhi
Doha
Dubai
Dublin
Frankfurt
Geneva
Helksinki
Hong Kong
Istanbul
Jakarta
Johannesburg
Kiev
Kuala Lumpur
Lima
Lisbon
Ljubljana
London
Los Ángeles
Luxemburg
2,312
1,761
1,979
1,742
1,981
1,884
1,730
1,837
1,912
1,831
2,331
1,879
1,854
1,674
2,265
2,166
2,096
1,707
1,731
1,893
1,713
2,296
2,140
2,112
1,887
1,850
1,986
2,107
1,969
1,792
1,787
1,943
1,788
7
29
9
29
15
24
20
26
23
13
15
18
12
30
14
26
25
21
28
20
29
12
19
12
15
25
15
27
22
23
23
13
25
36Höfert,Andreas (2012). Prices and earnings. A comparison of purchasing power around the globe. UBS.
nhttp://www.ubs.com/global/en/wealth_management/wealth_management_research/prices_earnings.html. Methodology:
Annual working hours including vacation (paid) and legal holidays; weighted average of 14 professions (excluding primary
school teachers).Vacation days per year (1) Paid vacation days (excluding legal holidays)
22
Lyon
Madrid
Manama
Manila
México City
Miami
Milán
Montreal
Moscow
Mumbai
Munich
Nairobi
New York
Nicosia
Oslo
París
Prague
Riga
Rio de Janeiro
Rome
Santiago de Chile
Sao Paulo
Seoul
Shanghai
Sofia
Stockholm
Syndey
Taipei
Tallinn
Tel Aviv
Tokyo
Toronto
Vienna
Vilnius
Warsaw
Zurich
1,642
1,734
1,989
2,246
2,375
1,939
1,753
1,783
1,800
2,251
1,756
2,197
2,062
1,779
1,749
1,558
1,829
1,806
1,895
1,899
2,035
1,810
2,308
1,967
1,894
1,795
1,846
2,116
1,760
1,966
2,012
1,847
1,786
1,789
1,793
1,887
27
30
22
11
6
12
23
13
25
20
26
22
13
22
25
30
21
23
30
22
15
30
14
9
22
26
15
11
28
16
17
14
25
24
23
24
2.5 Foxconn and IBM: mandatory vacations
In article 24 of the Universal Declaration of Human Rights it is set forth that “Everyone has the
right to rest and leisure, including reasonable limitation of working hours and periodic holidays
with pay.”37
Despite this being a universally acclaimed right, it is not always respected.
With the goal of protecting the workers’ right to rest, Mexico’s federal labor law establishes that
“employers shall annually provide their workers with written proof containing their seniority and
according to it the vacation period that corresponds to them and the date on which they shall
37http://www.un.org/es/documents/udhr/index_print.shtml
23
enjoy it.”38
Don Javier worked for 14 years inFoxconn, last year in a warehouse where IBM servers, and
other brand products are stored. For the past 10 years Don Javier worked in that warehouse
outsourced through the employment agency Spyga. Although this agency is certified as a
socially responsible company by the Mexican Center of Philanthropy39, Don Javier says that in
his experience, it does not respect its legal obligations regarding vacations.
Don Javier’s wife was suffering from cancer and had to visit her doctor constantly. But on
occasions, when Don Javier wanted to use his vacation days to take his wife to the doctor, the
agency told him he didn’t have any vacations. He told us:
“When I asked for my vacation days to take my wife to the doctor, they told me I didn’t have
any, but they never wanted to give me a document that stated what days I had taken, they
didn’t even tell me orally. I told them I could no longer work like that, that they had been doing
the same thing for years and that before I didn’t care, but that now I couldn’t do it anymore
because I had to help my wife.”
This form of proceeding is part of an agreement called “DHP”
(“Descansoporhorasprogramadas”: Rest in exchange forprogrammed hours), whose existence
was confirmed by the company through a written communication40 and in an interview with a
representative of the Spyga agency41 .
But what happened to the workers’ vacation days?
Ruth, after 16 years of work for IBM (hired either directly by IBM or by one of IBM’s suppliers)
tells us what happens:
“When there’s libranza42or the company is taking inventory or simply because there areno raw
materials, the people from the agency tell you that they are going to count those days as
vacations, and if you don’t have any more available days, they take them from the following
year. That’s why sometimes we owe vacation days from the following year. The other option
they offer is for you to take an unpaid leave ofabsence, but I don’t like it because they count it
as an absence and deduct the day. That’s when I say, why should they deduct the day or make
me take vacation days? I didn’t ask for them!”
Mexico’s Federal Labor Law established that “the employer’s obligation of paying the salary
shall not be suspended except in the cases and requirements established by law” 43and among
those cases and requirements established by law, repairs, inventory or improvements to the
38 Official Gazette of the Federation 2012, November 30. Federal Labor Law, Mexico, art. 81
39http://www.cemefi.org/esr/
40Héctor Ochoa, Foxconn, e-mail sent to Cereal, September 1, 2014
41The initials mean “Days of Scheduled Hours”.
42Libranzais the period in which a company makes repairs and suspends production operations. This suspension is solely the
company’s decision.
43Official Gazette of the Federation 2012, November 30. Federal Labor Law, Mexico, art. 106
24
work center are not included.44Forcing employees to miss their work without paying their salary
or forcing them to use their vacation days is illegal.
According to the people interviewed, in 2001 the agency made them sign that agreement. The
agency told them that as a result of the Twin Towers attack, orders had dropped and that in
order to not lay off so many employees they asked for their authorization to make the
agreement. The “DHP” agreement establishes that for every evening or morning shift they have
off, they have to repay the hours of that shift with overtime in the next shift, or that for each two
morning or evening shifts not worked they have to do a night shift plus 30 minutes.
Workers interviewed by Cereal during the year do not know exactly what the “DHP” agreement
says, because they were not given a copy of it, nonetheless because of the workers’ experience
they know how it works. The workers don’t know why this agreement is still in force after 13
years:
“They told us it was because there were no orders, and we accepted because they were hard
times, but isn’t the economy better? They never told us for how long this agreement would be in
force and to date they even apply it to newly hired workers.”
Ruth’s case is particularly difficult as she has a son with a disability who requires special care,
so on occasions when they force her to make up hours in the night shift, she doesn’t have
anyone to leave her son with. Ruth tells us:
“The problem is that they want to arrange our rest days and vacations as it suits them.
Sometimes I tell them I can come even if there’s no work, that I can sweep, work in the garden,
but they don’t accept and it’s very hard for me to not be around when my son needs me. I also
don’t think it’s fair.45 Sometimes we, as mothers, need days to take our children to the doctor or
deal with matters at their school and we ask for days from our vacation or ask for them in
advance, like they do, or we propose the possibility of making up the hours in another shift, and
but they usually don’t let us. It’s only possible when they need it.”
Despite the agency assuring that the workers “have freedom to register or not to participate in
(any) distribution plan of their work shift without impinging upon their rights 46”, testimony from
the workers contradicts this version.
The fact that the company counts the rest it forces as an absence has two negative
consequences for the workers:
1. it establishes a record of absences that could later be used to argue the worker is often
absent
2. it affects the amount they are entitled to in the company’s annual profit sharing, according
to the Mexican federal labor law47.
In addition to the foregoing, the problem is intensified as it has an impact on the workers’
44Official Gazette of the Federation 2012, November 30. Federal Labor Law, Mexico, art. 52
45 We understand that the worker is saying that the arrangement is not fair because it is not bilateral.
46Héctor Ochoa, Foxconn, e-mail sent to Cereal, September 1, 2014
47 One of the criteria for the annual profit sharing among the workers is the total number of days worked during the year.
25
families’ quality of life.
This personnel management system has a far-reaching impact on the life of the workers. Last
year Miriam asked for a 7-day leave-of-absence to attend the most important celebration of her
religion, which is fundamental for the community she belongs to. In principle, she could take
some days off her vacation time she is legally entitled to, but because the company had forced
her to take those days during the year when it had suspended activities, Miriam had no more
available vacation time.
Her direct bosses gave her permission to miss only three days so she went to see the Human
Resources Manager through her representative at the agency that had hired her, to get the rest
of the days. She was given permission with no pay that would appear in the payroll as
absences.
When she returned to work, her immediate bosses began to harass her because in the words of
one of them, the worker “had gone over their head”.
When she spoke to Jose Carrion, Foxconn’s Human Resources Manager, about what had
happened, he told her: “You have it made! You take vacation time during the entire year and
afterwards come to tell us you need 7 days and then you go.” The worker tried to restate her
case but Jose added: “If you don’t have any more vacation time, take it from the DHP
agreement, and if you don’t want to make up the hours, don’t take it!”
“If you didn’t force me to take my vacation days”, Miriam said, “I could choose when to take it
and I wouldn’t have to go through all this.”
In this case, the provisions of Article 18 of the International Covenant on Civil and Political
Rights48 were violated as was the Universal Declaration of Human Rights49 because Miriam
could not have the days off needed to practice her religion due to the fact that the company
forced her to take vacation time and she was not allowed to take it freely.
On October 28, 2014, Cereal interviewed representatives from IBM and the agency Spyga, who
assured that the program was entirely voluntary and that the hours they had to “make up” have
an expiry of three months and that in addition to the options the workers mentioned, there is the
possibility of covering their work shift in another area during the same schedule. After this,
Cereal interviewed a new group of workers. This new group of workers confirmed that the
option of covering their work hours in another area (different to their regular position and area)
is, in theory, an option.But in practice it is the least used, as, for example, if there is inventory or
general repairs are being performed, there are no other areas where to place all the people.
This group of workers agrees that “if you don’t want to sign the agreement, you are pressured
(to accept), and if you refuse then they don’t authorize vacations when you ask for them or they
accuse you of not cooperating with the company” and continued saying “it’s very strange for the
hours to expire, as when its closing and production increases they ask us to come work the
hours we ‘owe’ them”.
48International Covenant on Civil and Political Rights (ratified by México en
1981).http://www.inali.gob.mx/pdf/Pacto_Derechos_Civiles_politicos.pdf
49The Universal Declaration of Human Rights art. 18 http://www.un.org/es/documents/udhr/
26
The Corporate responsibility to respect human rights, an interpretive guide50to the United
Nation’s Guiding Principles on Business and Human Rights set forth that “the responsibility of
respecting human rights is not limited to the compliance with the provisions of the national laws.
This responsibility exists over and above legal compliance, constituting a global standard of
expected conduct applicable to all businesses in all situations”. In this case, the agency that
hires the personnel for IBM’s supply chain does not even comply with the standards the local
law establishes.
IBM sent us the following response withregards to this case:
“We perceive that the name of IBM is being used out of the context in two of these cases since
the editor does not relate the existing working relations between the involved companies.IBM
fiercely refuses the use of its name to get media attention. The mentioned companies in the
report do not only provide services to IBM but also to other brands, the supply chain therefore is
in the responsibility of all the involved actors: The companies, the suppliers, NGOs, etc. the
ethical behavior and responsibility of all parts creates better conditions of cooperation.
The supply chain is a strategic asset that allows us to satisfy the needs of our clients, IBM
recognizes the importance and responsibility of it and we focus our strengths to promote
sustainable behavior as shared objective51.”
Cereal recognizes that Foxconn(and its employment agencies) work for other companies also
and is trying to engage them to respect labor rights, beyond compliance with local law.
2.6 Freedom of Association
During 2014, a series of newspaper articles published in the city of Guadalajara unleashed a
scandal surrounding a family of local union leaders that flaunted luxuries and riches impossible
to explain52. These articles mentioned that the children of this family of unionists frequently flew
in a private jet to Las Vegas. They also showed luxury cars, apartments and expensive houses
that were owned by the family. Even the clothes and shoes of the youngest members were
brand name highly expensive models. All of these goods were far from corresponding to the
income the family members earned for their union activity. Despite the anger these articles
caused among citizens and workers from Guadalajara, practically no one was surprised by the
news.
In Mexico there is an extremely irregular situation regarding unions. There are thousands of
unions operating in the country that number millions of workers, but the vast majority of these
workers do not know their own leaders and do not trust anything that has to do with the unions.
This is due to the fact that the majority of the union leaders in Mexico do not defend the
workers, but rather the companies. This type of union leader provides protection to the
companies going against the workers who try to create an authentic union, and in exchange for
that protection the companies pay the unions an amount of money called “union fees”. Even
50 The corportate responsibility to respect human rights (2012),
http://www.ohchr.org/Documents/Publications/HR.PUB.12.2_En.pdf(consulted on 03 February 2015).
51This is a translation from the Spanish response sent to Cereal by IBM.
52Gil, Melina, 2014, Marzo, 19, “Ni una bicicleta”, Mural. February 13 y 14 y March 21, 2014.
27
though this entire procedure is carried out legally, it is far from the nature of what an authentic
union should be53.
In Guadalajara this situation acquires very peculiar characteristics, as practically all of the
workers of the electronics industry belong to a union, but almost none of them know it.
According to the official website of the Secretariat of Labor, by January 2015, there were 1,841
unions in Jalisco; the unions had signed 19,431 collective agreements with companies. At the
end of 2014, in Guadalajara there were 481 unions. In that same year, the unions had collective
agreements signed with 35,674 companies. At first glance one can see there are a lot more
agreements than unions, which means that some unions sign collective agreements with
hundreds of companies at a time. This can only be understood if one considers that these
unions are not real and only operate as collection offices for the companies. The usual work of
this type of union leaders is to maintain their unions artificially, as they do not practice a real
union life, that is, the workers do not participate in the meetings and much less know about the
negotiations carried out between the union and the company. According to the testimonies of
the workers interviewed by Cereal, when attempts are made for the workers to organize
themselves freely, the illegitimate unions and the companies prevent it by threatening them with
dismissal.
Sanmina: the same company with different realities
In the first half of 2014, the Brazilian economy had its worst performance since the 2008-09
crisis. Experts attribute this tendency to two causes: The first related to the 2014 FIFA World
Cup and a large amount of holidays that helped reduce the result of the first semester of 2014,
but analysts indicate that the greatest uncertainty are the elections.
“The reputation of the people who will be in government is directly proportional to the amount of
optimism we will see,” said Marcelo Salomon, Barclays’ economist
However, the trend in the electronic goods production sector is different. Production of
electronic goods in Brazil during the first seven months of 2014 grew 4.3% compared to the
previous year, according to data of the IBGE published by the Brazilian Electrical and
Electronics Industry Association (Abinee). Computer and communication equipment production
grew 47.6% and 11.5% respectively. This stability of the production of the electronics sector
was mainly due to the production of smart phones and tablets54.
Many of the companies that operate in Brazil also have operations in Mexico. It is important to
mention that despite some of these companies having collective work agreements signed with
representative and legitimate Brazilian unions, they continue to be profitable. One of the most
rooted prejudices in the electronics industry sector in Mexico regarding unions is that, if there
53A highlyreputedresearcheronlabourissues in Mexico, Graciela Bensusán, has statedthatcollectiveagreementswhich in
factprotecttheemployers (“contratos colectivos de protección”) are “themostimportant vice of theMexican industrial
relationssystem” (Bensusán, 2006: 330, quotedbyFujii, Gerardo, (2009), “Las relaciones laborales en México: rigidez legal
y flexibilidad de hecho”, Revista del Ministerio de Trabajo en Inmigración. Economía y Sociología, 81, pp. 115-132,
http://www.empleo.gob.es/es/publica/pub_electronicas/destacadas/revista/numeros/81/105.pdf (consultedonFebruary 3rd,
2015).
54Teleco (2014, 21 November), “Cell phones: production, exportation and importation”,
http://www.teleco.com.br/en/en_celprod.asp (05 January 2015)
28
were genuine, functioning unions, the industry would be nonviable. There is a belief among a
wide sector of executives and shareholders of the electronics industry in Mexico that the unions
are only necessary to solve problems –or that they just make problems. In conversations with
Cereal managers have also expressed the view that if the companies’ escalation systems of
internal complaints work as they should, theunions mediation is no longer necessary.
In practice, and in most cases, these internal systems are not effective for one basic reason: as
individuals, the workers are always at a disadvantage when it comes to negotiate with the
company because of the disparity of power. In contrast, where there are legitimate unions,
organized workersarein a stronger position to negotiate their demands.
Sanmina has a plant in the region of Campinas in Brazil and another in the metropolitan area of
Guadalajara. Although they do not produce exactly the same thing, the companies are
governed by the same codes of conduct and corporate policies in Mexico and Brazil. The
Campinas plants have a collective agreement with the metallurgical union of the Campinas
region55, and the one here with SETEAMI. The Brazilian union has a visible, democratic and
representative structure butthe Mexican one does not.
The difference between the working conditions of Mexican and Brazilian workers is very
significant, despite them working for the same company and that in many cases some
managerial positions are the same for both plants.
In this chart we can see the difference between the work conditions of a Mexican worker and a
Brazilian one with the same position (production line workers in both cases).
Table 8
Nature of benefit
Contract Types
Maternity Leave
Holidays
Brazil
-Temporal from 1 up to 6
months, after this period the
company signs the workers
up or dismiss them.
-Permanent
180 days of maternity leave
A bonus equivalent to 20% of
salary is paid unto each child
is 18 months old.
30 days of paid holidays
including 1/3 more income
Mexico
-The worker can be
contracted temporarily for
over 5 years
-Permanent
42 days before the predicted
birth date and 42 days after
giving birth. If the mother
gives birth before the first 42
day period has concluded,
she loses the remaining days
of said period.
Temporary workers 6 days
per year without pay
-Permanent 8 days in the first
year, and depending on the
years working what the law
states (After 20 years
working without interruption,
a worker can take 20 days
off)
55http://www.metalcampinas.com.br/
29
Savings fund
Annual Raises
All workers have this benefit
Done each year when the
collective bargaining contract
is negotiated
Employment Benefits
Grocery coupons worth 46.10
dollars, not deducted from
wages. And adjusted each
year.
Only permanent workers
A percentage close to the
country’s estimated inflation
rate. There is no negotiation
with the union; the company
decides the percentage of
wage increase.
Grocery coupons
Private medical and dental
agreement N/A
Doctor and dentist
agreement: for all workers
deducting 15 dollars from
their wages
Child assistance bonus
Sources: Workers interviewed by Cereal, in the case of Mexico; Campinas Metal Workers Union, in
the case of brazil
Why this difference?
The Campinas union achieved the signing of a collective agreement with Sanmina in 2008.
Sincethatyeartheworkconditionshaveimprovedsubstantially.
En ese periodo de tiempo, los sueldos se han incrementado 78%, la ayuda para comida ha
aumentado 112% en este mismo periodo y se han conseguido prestaciones laborales por
encima de las que marca la ley. Todo esto se ha logrado sin que la empresa deje de ser
rentable.
In Mexico, on the other hand, the nominal salary in these companies has decreased in the
same period. On top of that, we have to consider that the purchase power has
declined.Obtaining these demands through an open-door system in Mexico is practically
unthinkable, thus an internal escalation system of complaints or an open-door policy will never
be enough, as effective as they may be.
One of the major roots of inequality and lack of quality of life for Mexican workers in the
electronics industry –and in general for workers from other sectors as well– is the fact that
legitimate unions do not exist to represent them. Even though the right to form unions freely is a
universally recognized human right, the systematic violation of this right is greatly fostered by
companies that sign collective agreements with white unions, which then suppress attempts to
form new unions.
2.8 Sexual Harassment
30
Since the publication of its first report in 2006, Cerealhas warned the companies of Mexico’s
electronics industry about the existence of sexual harassment cases inside the factories. The
evidence contained in the workers’ current testimonies suggests that to this day the companies’
response has not been enough. Almost 90% of the more than 3,000 workers that Cereal
interviewed during 2013 and 2014 told the team that they were aware of one or more cases of
sexual harassment occurring in their work centers.
During that same period the workers, especially the female workers, assured the Cereal team
that sexual harassment continues to be a common practice in the electronics industry. The
interviews with the workers reveal that the most common form of sexual harassment is
performed by superiors towards lower-rank female workers. The superiors, taking advantage of
their position, condition the granting of absence permissions, vacation days or promotions in
exchange for sexual favors from the female workers.
The vast extent of this problem can be explained both by psychological and cultural reasons.
The harassers frequently feel protected by occupying a high-hierarchy position and the victims
almost never report the events for fear of being pointed out or simply being fired. Unfortunately,
these fears are not completely unfounded. The macho culture that prevails in Mexico frequently
places the victims of sexual harassment in a category of “teasers” and since the harassment is
almost always from a superior to a worker, the possibility of one of these workers being fired for
reporting the events is very real. In the face of this situation, the effectiveness of the companies’
policies in preventing and addressing cases of sexual harassment is extremely important. A
worker that has been victim of harassment will not dare to report her harasser if she is not
certain that the company will take her complaint seriously. In consequence, companiesurgently
need to generate that trust among workers, resolving the harassment complaints brought by the
workers quickly and efficiently. In this sense, Cereal once again warns that the internal
complaints-handling systems used by many companies of the electronics industry in Mexico do
not work properly and this reveals the importance of allowing the workers’ free association in
union organizations that represent and assist ordinary workers in these types of case.
2.9Sexual Harassment in Microsoft and Benchmark
Civil society groups working with women in Mexico highlight the links between gender inequality
and forms of violence. In Mexican society these are practices that are used to demonstrate
manliness and power towards women or towards other men56.
One of the most influential factors is a lack of equity in work relations. According to data of the
National Occupation and Employment Survey (ENOE) from the second quarter of 2014, of the
52 million economically active population, 19.7 million are women and 32.3 million are
men57.Although there has been an advance of female participation in the work field, it has not
translated into better equality conditions, as generally women occupyroles with a lower status
56ONU Mujeres, INMujeres, LXI Legislatura, Cámara de Diputados, Comisión Especial (2012), “El origen de la violencia
hacia las mujeres”, en Violencia feminicida en México. Características, tendencias y nuevas expresiones en las entidades
federativas, 1985-2010, http://vidasinviolencia.inmujeres.gob.mx/sites/default/files/F05-1feminicidio1985-2010nal.pdf
57http://www3.inegi.org.mx/sistemas/temas/default.aspx?s=est&c=25433&t=1
31
than men and receive lower remuneration, even in the same work positions58. Mexico’s
electronics industry is no exception to this general tendency.
Jazmín and Milagros work in the electronics industry; Jazmín as a production line operator (at
Benchmark, Guadalajara) and Milagros in charge of the communications area at the former
Nokia plant, now owned by Microsoft (in Reynosa).
Jazmín has worked at Benchmark for more than 10 years. After a few years in the plant, she
decided to ask for a promotion. On this first occasion, they refused as she did not have high
school studies and the position’s profile demanded it. After this, she decided she wanted a
higher position and began studying high school and a bachelor’s degree in engineering. In 2014
she decided to reapply for the promotion. A supervisor found out about her plans and offered to
help her get the promotion in exchange for having a sexual relationship with him. The
production manager gave her the position change document to sign. The supervisor told
Jazmín that thanks to hisparticipation they had given her the change and insisted on calling in
the “alleged favor” with sexual relations. Jazmín decided to report the harasser and the lack of
recognition of her position (which implied a salary raise) through Benchmark’s internal
channels. The supervisor was finally fired.
Jazmín was at ease with the decision the company made regarding the sexual harassment
case, but the matter of the salary raise is unresolved to this day. She had no idea of the
consequences this would later have.
From 2007 to 2010, she worked in supervising functions. The position set forth in the payroll
was still of universal operator, and she didn’t get the salary raise because she didn’t have the
academic level required (unfinished engineering). In 2011, she worked at the position of leader
in SMT, but there were no vacancies to formally occupy that posteither. From 2011 to 2013 she
worked in the RMA (customer returns, in the quality department) area, reporting directly to the
Quality director. There were not vacancies there either. In 2014, she decided to apply for a raise
and she tells us what happened when they called her in to deal with the case.
“They called me in to tell me that I wouldn’t be given the position of leader by promotion; even
though I was performing this job, they never wanted to make it official or give me a promotion.
There was a meeting with the HR Manager, VíctorMartínez, the superintendent of employee
relations, Felipe Valadez, the manufacturing manager, Rafael Amezcua, the supervisor, José
Gudiño, and me. In this meeting I was informed that the reason why I didn’t get the position was
because the human resources department could not allow me to get that position or salary raise
because I didn’t have the work attitude for that post. Mr. Martínez stated that the perception HR
has of a person is reason enough to deny a promotion.”
Jazmín answered that she didn’t know why Mr. Martínez said such a thing and asked to see the
documentation they had supporting it and if they had any testimony from her direct supervisors
that backed that judgment about her. VíctorMartínez, Jazmín tells us, said the proof he had was
enough and the decision was made, and that being liked by everyone was an essential
requirement to get the position and as long as that didn’t happen she wouldn’t get the position.
58Más allá del homicidio de la pareja ¿Feminicidio o violencia estructural contra las mujeres?”, en Violencia feminicida en
México. Características, tendencias y nuevas expresiones en las entidades federativas, 1985-2010 (op. cit.),
32
“In the last meeting I was called to they told me that they weren’t going to give me the position.
Víctor Martinez reproached me that they had already fired a supervisor for no reason because
of me59and he asked me ‘if you’re so good and the company is so bad, why don’t you look for
an opportunity at another company instead of having so many problems in this one?’ and he
mentioned the company next to Benchmark was hiring a lot of people”60.
On October 29, Cereal had a meeting with Benchmark representatives to follow-up the case. In
this meeting the Benchmark representatives assured that the supervisor had been fired
“because of Jazmín’s whim” and that man “had an impeccable conduct” and that, in contrast,
Jazmín had an “inappropriate sexual conduct”.
According to Benchmark’s version, they made, along with the supervisor, the decision of
making him resign and he was given a compensation at 100%, although it did not correspond
as harassment is a cause for dismissal.
After this meeting, Cereal interviewed more female workers from Benchmark; three of them had
also been sexually harassed by this supervisor. Among these testimonies is Susana’s, who tells
us:
“he would come up to us in the line and he was insistent with his invitations to go out or on
occasions he would openly tell you that he liked you and invited you to go to a motel after work”.
Sonia, another worker, comments:
“After the first indecent proposal, I just made it very clear plain and simple that we could only be
colleagues. I knew, because of my colleagues’ comments, that after he gets one (woman) he
dumps her and goes on to the next. He didn’t want us for anything serious. We all knew exactly
what he was like.”
One of the characteristics of sexual harassment is that “it is a phenomenon that affects a group
defined by the sex of the people who make it up: women, to treat them in a special way that has
wretched repercussions and attacks their condition as workers. Sexual harassment imposes
restrictions to women that are not applied to men. It deprives them of possibilities that can
benefit male workers without sexual determinants. In the end it creates two rules for work: one
for women, which includes sexual demands, and the other for men, without these demands”61.
Milagros’ case has other components. She was in charge of communication at Nokia, now
Microsoft, and reported directly to David Torres, HR manager. She had worked at the plant for
almost six years. She stated that on more than one occasion comments about her figure and
emotional situation made her uncomfortable. As time went on, the “work” meetings to which she
59Referring to her sexual harassment report
60 File attached by the worker with the emails sent to Scott R. PetersonVP & General Counsel of Benchmark Electronics,
September 2, 2014
61See: United Nations (2006), Ending violence against women: From words to action, Study of the Secretary-General of the
United Nations, http://www.un.org/womenwatch/daw/public/VAW_Study/VAW-Spanish.pdf (November 24, 2014).
33
was called were more about her intimate life than work-related matters.
In November of 2013 Santa Marcial replaced Ana Gonzalez in the HR department. In
December of that year, Santa asked Milagros to come to her office under the pretext of
discussing several issues. Milagros thought that would be good opportunity to bring up the
harassment she had suffered since she had already broached this topic with Ana Gonzalez
without receiving any favorable response. They began to talk about work-related issues,
including the transition the company would have. Santa mentioned during the meeting that that
the real reason for it was to talk about “more personal topics”.
Santa said that after talking to several people, she was concerned that she spoke ill of David
and said that “He has placed all his trust in you, he trusts you completely, he gives you special
treatment and I think that is in your favor.” At that time Milagros commented that was just what
she wanted to talk about, that this “particular” treatment included looking at her lewdly, out-ofline body contact, remarks about her body and her love life, etc. She expressed her discontent
explicitly and asked for the Human Relations Department to step in and put an end to this
problem. Santa answered that she was a bit confused, that she should reconsider and added, “I
wouldn’t like it if you were ungrateful for everything I’ve done for you.” Milagros tried to restate
her case but Santa concluded, “I don’t want to listen to gossip. I don’t want you to talk about him
like that. I want you to improve your attitude, and I want you to treat him better.” Milagros limited
herself to saying that she had been sufficiently professional in her tasks and in her treatment
towards David, and that was how she would continue to act. She added she had put up with
David’s insinuations because she needed the job but she wouldn’t tolerate more than what had
already happened. At that time Santa concluded the meeting.
On February 28 the situation came to a head. David Torres called her into his office and said he
needed her support that day; that he was under a lot of stress because of Day 1 62. Because
Santa was out sick and Martina63was no longer there, a vacancy had opened in Human
Resources. Then he said he could help her economically, all she had to do was ask. Milagros
refused because it was not within her area of expertise; besides she did not think it was ethical
to take Martina’s job. After insisting several more times, he said that the only condition for this to
happen was that she accompany him to a meeting in Mexico City with the Microsoft Manager
for Mexico. She refused because this kind of trip was not in her job description.
David replied that it was an order that she could not refuse, and added, “This is a chance to get
to know each other better because I think very highly of you.” After that, he made sexual
innuendos and insisted it was an order that she would have to obey, and if she did not do what
he was asking, he did not want her there. She left David Torres’s office and the plant amidst
threats and shouts. That was the last day she went to work and afterwards Milagros filed an
employment-related claim based on wrongful dismissal.
Milagros contacted Microsoft’s Corporate Legal Department to May to apprise them of the
situation. An attorney and two inspectors contacted her. She told them her story and they
62This is how people referred internally to the day Nokia would officially hand over the plant to Microsoft
63Martina Worked In The Human Resources Department. She was aware of the harassment suffered by Milagros, and was
fired without justification. Milagros currently has a wrongful dismissal complaint being heard by the local Administrative
Labor Court.
34
undertook to help her. Two months later a representative of the Legal Department called her
and said that David Torres had flirted with her and yes, he had been seen looking at her “chest
and tail”, but that was not harassment.
Milagros decided to file a sexual harassment complaint.
On June 12 David Torres was summoned to appear to answer charges of sexual harassment
by the Second Special Agency of the Attorney General’s Office but failed to appear at the first
hearing. Another person summoned to give her statement was Martina who knew about the
harassment suffered by Milagros and who had been fired. After giving her statement, Martina
began to receive e-mails with death threats to her and Milagros.
There are several different consequences of sexual harassment in women who have suffered it.
The main ones are: voluntary resignation or dismissal, subjection and silence so as to not lose
income, sense of guilt, as many times they are made to believe it’s their fault for being
“provocative”, in addition to nervousness, anxiety, depression, and other psychosomatic
disorders that end up taking a toll on their work, family and health.64 And if we add physical and
psychological violence, the situation becomes alarming.
Sexual harassment in the workplace is very common,65 and unfortunately it will continue to be
as long as the companies do not make sure their employees actively support a culture of
respect and non-violence.
In an email sent to Cereal on October 14, 2014, Microsoft said that it was “in an active process
of investigation (of the accusations) and was to take the necessary measures”. But to this day,
Microsoft has not informed Cereal (or the workers implied) what remediation plan will be
implemented. In the meantime, David Torres is still manager of the Reynosa plant and there are
judicial proceedings in process against him. The court of first instance denied his request for
legal protection (amparo) that would render the sexual harassment charges ineffective. Milagros
has not received any type of explanation from Microsoft.
Enviamos una copia del caso a Benchmark; no hizo comentarios al respecto.
2.10 The new federal labor law in Mexico and temporary agreements
With the coming into effect of Mexico’s new federal labor law, in December 2012 a series of
restrictions were imposed as to the use of temporary workers and the use of outsourcing
through employment agencies. Such restrictions are stipulated mainly in article 15 of the new
law. Despite this, the companies of the electronics industry continue to use temporary
agreements and employment agencies in highly disturbing percentages, which sometimesrange
from 30 to 60% of their total workers. The new law sets forth that companies cannot outsource
a worker that will be assigned to perform work that is fundamental to the company. In this
sense, the workers that perform manufacturing and assembly activities electronic equipment
64http://cedoc.inmujeres.gob.mx/ftpg/Aguascalientes/ags_meta8_2011.pdf
65http://estadistica.inmujeres.gob.mx/formas/convenciones/Nota.pdf
35
must not be temporary or outsourced, as it is precisely the fundamental activity of most of the
companies of the electronics industry. However, approximately half of the workers of this sector
in Mexico are outsourced and are hired through temporary agreements of 1 to 12 months.
According to CEREAL’s analysis of the new federal labor law, this places most of the
manufacturing companies and employment agencies in a situation of illegality. Cereal urges
the companies of Mexico’s electronics industry to review their hiring policies and modify them
so that they are in accordance with the provisions of the new labor law.
2.11 Foxconn: series of temporary contracts
When the labor reform was being promoted, one of the things the Federal Government and the
some members of Congress promised was that they would regulate the outsourcing sector. It
doesn’t seem that has happened.
With regards to series of agreements contracts, the law has not been modified and sets forth
that “If at the end of a fixed term contract for work the employer has a continuing requirement
for the type of work that has been the subject of that fixed term contract, then the employee
shall continue to be employed to undertake that work for such period as there shall be a
requirement for that type of work to be undertaken” (art. 39).
Juan, who has worked at Foxconn for over 2 years, was hired by the Azanza y Associados
Agency.
Unlike the other agencies hiring personnel for the IBM supply chain, Azanza does give a copy
of the agreements, although they are illegal.
Juan will sign agreements monthlyas a temporal employee“until the permanent position is
granted through Azanza y Asociados S.C66”, as stated by a representative of the agency67. This
situation is illegal: his situation does not meet the requirements of the law for temporary
contracts; besides, the law explicitly forbids this series of contracts.
Something similar happens at Sanmina: about 3,000 workers are hired for a specific project and
sign employment agreements each year. Sanmina used to recognize a direct working
relationship after three years of hiring a worker; but the company has changed its policy. Until
now Sanmina has decided not to recognize the seniority of assembly line area workers, arguing
that it is applying the new labor law reform provisions. But this interpretation is not in line the
reform: term of the contract is related to its nature, so even if a company makes you sign a fixed
term contract, if the work is of a fixed-term nature, the contract will extend as long as the work
extends (art. 39 of Mexican Labour Law).
Plus, outsourced personnel do not meet the conditions provided by law to be hired under this
system. For instance, subsection B of Article 15-A reads, “Services may be justified due to their
specialized nature”. Under this condition, we understand that the need to subcontract only
means that there are no employees at the workplace with the knowledge, capacity, skills or
66In Mexico, employment agencies give permanent contract to workers and they become part of its personnel. This situation
does not improve the workers perspective regarding security of employment because, in theory, he/she can be assigned to
any activity by the employment agency,and not specifically to the job currently performed; so this status leaves them
exposed to a drastic change in terms of shift, workplace, workload, etc.
67IciarAzanza, Azanza y asociados , electroniccommunicationaddressedto Cereal, November 20, 2014
36
know-how needed to perform certain activities. For instance, people to maintain networks, or
security and cleaning personnel (when the company does not perform such activities).
Subsection c reads, “It may not include tasks the same as or similar to those performed by the
rest of the employees hired by the employer”. This condition is not met either.
When the Federal Labor Law reform was under discussion, Cereal and other community
sectors warned that these kinds of abuses could happen68, while the Mexican Employers’
Association (Coparmex)asserted that it was needed to improve competitiveness and productive
investments, arguing that it already existed in other countries. The business sector pressed so
strongly for changes to the subcontracting system that Coparmex’s legal representative
publically admitted, “If this item is conceded to us, the rest would be the icing on the cake.”69
Despite that, the law has not brought the expected benefits 2 years after it was enacted.
Mauricio Kuri, President of the Employers’ Confederation of the Mexican Republic (Coparmex)
in Queretaro, said,
“We had very high expectations with the labor law reform. It was a reform that had not been
taken up over the previous 40 years and the good news was that it was a reform that took into
account the will of all the (political) parties to make a more competitive law at the global level,
but the bad news is that the expectation we had of a million jobs has not been achieved and the
creation of new jobs has been quite below that expectation”.70
Lawmakers believed that the labor law reform would bring enormous benefits to workers, more
investment and better working conditions, but regrettably it has only served to make existing
jobs more precarious and has done little to eradicate old illegal outsourcing practices.
2.12 Microsoft: Many changes, little information
Although the sale of Nokia took place several months ago (April, 2014), the workers’ pay slips
are still labeled “Nokia Servicios”, instead of Microsoft. It seems the change of employers has
not been fully completed yet. This change has brought the workers a huge wave of uncertainty
and confusion.
One of the workers’ main complaints is that there is no clarity on the new direction the company
will follow. Soraya, a Microsoft worker, tells us:
“There was a meeting to let us know of the change a few days before it happened, but they
didn’t give us a lot of details on the purchase or the future activities that would be developed in
the plant.”
68 Robles, Paloma (2012, Octubre 10), “’¿Quién podrá defendernos?’”, Reporte Índigo,
http://www.reporteindigo.com/reporte/guadalajara/quien-podra-defendernos, consultado el 22 de octubre de 2014.
69 Alcalde Justiniani, Arturo (2011, Julio 30), “Tres graves riesgos de la reforma laboral”, La Jornada,
(http://www.jornada.unam.mx/2011/07/30/opinion/021a2pol, consultado el 22 de octubre de 2014.
70 Almanza, Lucero (2014, Agosto 10), “Reforma laboral, sin beneficios para los trabajadores: Coparmex”, El Economista,
http://eleconomista.com.mx/estados/2014/08/10/reforma-laboral-sin-beneficios-trabajadores-coparmex, consultado el 22
de octubre de 2014.
37
As an example, the interviewed workers mention that in a communication meeting that took
place in mid-August, a worker questioned the person leading the meeting saying, “When you
come up with a new product you always bring people from somewhere else, when are you
going to give us a chance?” The meeting leader answered that the first openings would be for
them, and that’s effectively what happened, but when they saw the profiles requested for
technicians, they understood that almost no one in the plant could cover the profile. “How can
they ask for that profile and experience if we’ve been here for several years and haven’t been
able to develop in other areas like programming, processors and microprocessors, etc.?” When
the workers mentioned this to their superiors, the answer they got was that there was no
problem, that there were already people covering those positions.
The uncertainty also grows because in the beginning the workers were told that they were going
to perform a repair at the assembly level, and now they want to repair at the components and
diagnosis level. All of this, in addition to lack of work, has made anxiety grow among the
workers and the fear of being let go for not meeting the necessary profile for the plant’s new
functions.
Another situation that bothers the workers is that there is not enough information to know who
the employer is: the payroll says Nokia; their ID badge, coat and workplace say Microsoft. This
has not only caused confusion, but also practical problems. For example, a worker attempted to
ask for a Fonacot71 credit and it was denied because the corporate address on the payroll does
not correspond to the one on the ID badge. Another worker was stopped by the hawks72 of her
neighborhood who asked her to prove she worked close by. She showed them her payroll, but
they asked for her ID badge. The hawk felt she was trying to trick him and it turned into an
uncomfortable and risky situation for the worker, as hawks are usually armed and tend to be
violent.
In this year, due to the fall in production, according to what Nokia personnel explained, they
have had two production stoppages where they’ve only been paid 30% of their base salary.
Bonuses are not paid during stoppages. They were also informed that there was a chance the
stoppages would be more constant and that they would only be paid 30% of their salary during
those stoppages, although they haven’t taken place.
Regarding the union, we can see that they follow a pattern similar to other companies. Nokia
entered into a collective agreement with a union that was publicly visible, but does not represent
the members’ interests. That same union changed its name to continue to have the collective
agreement with Microsoft. The workers found out about that change once it had already taken
place. Evidently this arrangement between the company and the union is very convenient for
both of them, but not for the workers.
Before publishing this report, Cereal had Microsoft receive a copy of the case, but we didn’t get
any answer.
71A government agency
72Hawks are people, usually men, who guard the areas that are under the control of drug cartels. They monitor people and
merchandises crossing and report incidents to their bosses.
38
3 With regards to the tenth anniversary of the
Electronic Industry Citizenship Coalition,
CEREAL expresses the following:
The EICC has prioritized growth in membership (they started with 8 companies and now there
are 100 or more) over establishing stricter requirements for companies that want to become an
EICC member. The main instrument to comply with their Code of Conduct continues to be the
audits, which on occasions show results strangely inconsistent with the reports of civil
organizations like CEREAL and others, for example members of GoodElectronics. For example:
freedom of association and collective bargaining are at the bottom of their list of problematic
areas, according with their audits, but many trade unions and civil society organizations (like
Cereal) find that these enabling rights are been systematically infringed worldwide.In short,
EICC, as abrand loses strength and its credibility fades away, especially for human rights
organizations that regard the insufficient progress of this industry body with suspicion and
disappointment.
For this same reason –preferring substantial membership, although with less stringent
parameters– the companies’ commitment is heterogeneous: some are more committed to the
progressive substitution of toxic substances, the reduction of excessive work schedules, and
the relative acceptance of a certain degree of freedom of association, while others
systematically look for the lowest labor and environmental costs, despite the negative effects on
the workers’ health and wellbeing, and also refuse to accept the workers’ right to freedom of
association and collective bargaining.
We urge the global electronics industry to assume a deep and straightforwardcommitment to
respecting human rights and environmental sustainability in the workplace. This commitment
includes subscribing and putting into practice the ILO core labour standards and similar
standards regarding environmental sustainability and responsibleuse of chemicals.
39
4 Cereal’s evaluation of compliance with labour
rights:
Name of the company
Ranking
Sanmina
HP
Samsung
Foxconn
IBM
Jabil
Flextronics
Motorola
Microsoft
HTC
Valutech
Benchmark
Improving
Improving
Bareminimum
Bareminimum
Bareminimum
Bareminimum
Insufficient
Insufficient
Insufficient
Verypoor
Verypoor
Verypoor
Very poor
Insufficient
Bare minimum
Improving
Excellent
0 a 25
25 a 50
51 a70
71 a 90
91 a 100
4.1 Index for evaluating compliance with labour rights, drawing on
human rights standards
In order to be more objective and transparent as to their evaluation of companies regarding
their compliance with labour rights, and taking into consideration some of the suggestions of the
companies themselves, CEREAL has designed this Index for evaluatingcompliance with labour
rights, based on human rights standards. The starting point is the principle that establishes the
companies’ responsibility to respect human rights and to implement due diligence “to identify,
prevent, mitigate and account for how they address their impact on human rights” (United
Nations Guiding Principles on Business and Human Rights).
This index comprises three dimensions:
1.
Labour rights drawing on human rights standards, which includes the following issues:
freedom of association and collective bargaining, security of employment, living wage,
working conditions (working hours, vacations, absence of discrimination, harassment or
humiliating treatment, healthy and safe workplace and working conditions, attention and
compensation in cases of work-related risks and accidents, social security, housing
benefits), gender equality, maternity and paternity leave and other rights, inalienability of
40
rights, access to judicial mechanisms regarding labour rights.
2.
Estimation of prevalence: based on the validity and reliability of the workers’ testimonies,
CEREAL estimates if a case is an exception, if it could be the case of a group of workers
or if it is a structural or systemic problem.
3.
Remedy of business-related human rights abuse: grievance mechanism, responsibility
regarding supply chain, use of the escalation system (CEREAL-CANIETI agreement).
Table 9
Issue
Human Rights standards:
References in terms of labour
rights
Declaration of fundamental
principles and rights at work
(ILO core labour standards),
United
Nations
Universal
Declaration of Human Rights
(UDHR) (art. 23)
References in terms of EICC Code of Conduct
Freedom
to
elect
representatives or to
be elected
ILO Core Labour Standards,
UDHR (art. 23)
Absence of reprisals or
harassment related to
union activities or
leadership
ILO Conventions 87 and 98
Collective bargaining,
bilateral agreements
ILO Conventions 98
The term of the
contract is related to its
nature: the contract
extends as long as the
work extends.
Mexican Labour Law (art. 39).
“The provisions in this Code arederived from
key international human rights standards
including the ILO Declaration onFundamental
Principles and Rights at Work and the UN
Universal Declaration of HumanRights”
(Preamble, 5.0 Version)
“The provisions in this Code are derived from
including
the
ILO
Declaration
on
Fundamental Principles and Rights at Work
and the UN Universal Declaration of Human
Rights” (Preamble, 5.0 Version)
“The provisions in this Code are derived from
including
the
ILO
Declaration
on
Fundamental Principles and Rights at Work
and the UN Universal Declaration of Human
Rights” (Preamble, 5.0 Version)
“Fundamental to adopting the Code is the
understanding that a business, in all of
itsactivities, must operate in full compliance
with the laws, rules and regulations of
thecountries in which it operates”
Workers’ real chance of
forming or joining a
coalition or union of
their own choosing
without
the
intervention
of
authorities
or
employers.
A-7 (partial)
41
(Preamble).
Dismissal notice and
severance package in
accordance with the
law,
absence
of
blacklist.
Support program to
help dismissed workers
to get a new job
Absence of abusive use
of
temporal/outsourced
work
Copy
of
working
contract
Minimum wage (above
poverty line)
Equal pay for equal
work
Profits distribution in
accordance with the
law
Overtime pay
Working hours
Vacations
Humane
treatment,
absence
of
discrimination
of
harassment
Safe
and
healthy
workplace
Attention
and
compensation in case
of an accident or workrelated ailment or
disease
Mexican Labour Law (art. 47,
133), Tripartite declaration of
principles
concerning
multinationals and enterprises
and social policy (Tripartite)
(art. 24 a 28)
Tripartite (art. 24 a 28)
Mexican Labour Law (art. 15 AD, 39, 39 A-F)
Full compliance with the laws.
“The Code encourages Participants to go
beyond legal compliance, drawing upon
internationally recognized standards, in
order to advancesocial and environmental
responsibility
and
business
ethics”
Mexican Labour Law (art. 24)
A-4 (partial)
Mexican Labour Law (art. 90),
UDHR (art. 23 y 25)
UDHR (art. 23)
Mexican Labour Law (chapter
VIII)
A-4 (partial)
Mexican Labour Law (art. 6668, capítulo II), UDHR (art. 24)
Mexican Labour Law (chapter
IV), UDHR (art. 24)
ILO Core Labour Standards
A-4
Mexican
Labour
Law,
International Covenant on
Economic, Social and Cultural
Rights (art. 7 y 12)
Mexican
Labour
Law,
International Covenant on
Economic, Social and Cultural
Rights (art. 7 y 12)
B.
A-4, A-6 (partial)
A-4
A-3
A-5, A-6
B.
42
Social security
housing benefits
Gender equality
and
Mexican Labour Law, UDHR
(art. 22)
ILO Core Labour Standards
Full compliance with the laws
Rights
related
to
pregnancy
and
maternity leave
Break for lactation
A-6 (partial)
Paternity leave
Absence of anticipated
signature of resignation
letters
Inalienability of rights
Mexican Labour Law (art. 5 y
33)
Mexican Labour Law (art. 5 y
33)
Mexican Labour Law, UDHR
(art. 8)
UDHR (art. 8), UN Guiding
principles on Business and
Human Rights
order to advance social and environmental
responsibility
and
business
ethics”
“Participants must regard the Code as a total
supply chain initiative”.
Access
to
judicial
mechanisms regarding
labour rights
Access to grievance
mechanisms for the
remedy of businessrelated human rights
abuse.
Responsibility
regarding supply chain
UN Guiding principles on
Business and Human Rights
Agreement
between
CANIETI and CEREAL
on
the
escalation
process
UN Guiding principles on
Business and Human Rights
A-6
“The EICC is committed to obtaining regular
input
from
stakeholders
in
the
continueddevelopment and implementation
of the Code of Conduct”.
order to advance social and environmental
responsibility
and
business
ethics”
43
Colophon
March 2014
Author
Published by
Design
Front page
image
Centro de Reflexión y Acción Laboral
GoodElectronics
Studio Annelies Vlasblom - www.anneliesvlasblom.nl
Takenfromthearticleby Grecia Sahagún Núñez, publishedby La Jornada
Jalisco onJanuary 27th 2015, “Jalisco cierra con exportaciones que
ascienden a 39 mil mdd: Sedeco”,
http://lajornadajalisco.com.mx/2015/01/jalisco-cierra-2014-conexportaciones-que-ascienden-a-39-mil-mdd-sedeco/
This work is licensed under a Creative Commons AttributionNonCommercial-NoDerivs 4.0 Unported License.
EU
This publication has been produced with the assistance of the European
Union. The content of this publication is the sole responsibility of Cereal and
can in no way be taken to reflect the views of the European Union.
Cereal
The Centre for Labour Action and Studies (CEREAL) is a project of
Fomento Cultural y Educativo, an apostolic work of the Mexican Province of
the Society of Jesus, which for the the past 42 years has been devoted to
educating and organising Mexican popular sectors.
Cereal provides legal assistance, labour rights training and organisational
support to workers’ groups; it also carries out research on working
conditions in different productive sectors in the country and promotes public
awareness campaigns to improve workers’ condition. www.cerealgdl.org/
Acknowledgements
We would like to important collaboration of Good Electronics and SOMO, and the valuable help
and comments from Anne Lindsay of CAFOD, and to extend our gratitude to CAFOD’s team.
The GoodElectronics Network accommodates networks, organisations and individuals
that are concerned about human rights, including labour rights, and sustainability issues
in the global electronics supply chain, including but not limited to trade unions, grass
roots organisations, campaigning and research organisations, academia, and activists.
The Network has a strict civil society-only profile.
44
www.goodelectronics.org

Paying the price for flexibility: Workers

Transcription

Similar documents

Poster - Taller de creación literaria

“El Blanco Licor de la diosa Mayahuel” (The White Liquor of

TEPOZTLÁN, MEXICO

Presentación de PowerPoint

Mexico is an independent country now, but it wasn`t always. For 300

Southern Expansion

Adams-Onis Treaty, 1919

MEDIA KIT

Josefina Vázquez Mota, President of Juntos Podemos

los güeros contact information form document information family